Despite talk about a supply reduction for July shipment from Australia due to logistical issues and miners’ maintenance works, ex-Australia premium hard coking coal (PHCC) prices have declined by $16/mt in the latest deal. Nevertheless, it is unlikely that prices will fall further, at least soon, according to sources.
A deal for 40,000 mt of Moranbah North or Goonyella mid-volatile PHCC has been done at $239/mt FOB for July shipment. According to market sources, the buyer is an East Asian mill. The previous contract was done at $256/mt FOB and the sudden drop has come as a surprise to market sources. “I still think that the real market should be at $245/mt FOB at the lowest now,” a trader said.
Demand from the major steel mills in India has been slow amid sufficient stocks. While Southeast Asian mills have also been uninterested in purchases, some demand can be seen from China, but only in the case of additional discounts, according to market sources. Last week, offers from some miners were as high as $270/mt FOB, but weak demand fundamentals showed that the market could not follow an uptrend anymore.
The SteelOrbis reference price for ex-Australia PHCC has been lowered by $16/mt to $239/mt FOB due to the deal in question, but it may be corrected a little higher in the case of higher deals or bids in the coming week. Some sources said that the tradable level for Indian customers would be $240-245/mt FOB in the next contracts.